FIGURE 1: RANHILL
UTILITIES BERHAD LAST 5 YEARS SHARE PRICE TREND
**analysis
based on 2019 annual report.
1. GENERAL INTRO: RANHILL's main business
segments include providing water supply to Johor state consumers, operation of
two power plants in Sabah, water and wastewater treatment business and
non-revenue water management.
2.
NOTABLE
POINTS:
According to the 2019
report, Ranhill has operations in Malaysia, Thailand, and China. As a utility
based company, it has a consistent and stable cash flow, also it tends to pay
up a high percentage of it profits to investors in the form of dividend.
3.
IS
THIS COUNTER A STRONG GROWTH STOCK?
a. REVENUE
RANGE (RM million): 1629.8 million as reported in 2019 annual report, this is a
relatively high revenue company.
b. SHARE
PRICE: from 2016-2020, share price peaked at around RM1.50 in 2019, then
dropped to the current level of around RM0.80.
c. EARNING
PER SHARE (EPS): earning per share in last 5 years was overall fluctuating, ranging
from 5.3 to 8.17 sen
d. FUTURE
POTENTIAL/PROSPECTS: share price expect to be stable in the next few years
e. CAPITAL
EXPENDITURE (CAPEX): spending on purchase of new fixed assets is RM 67.2
million, around 4% of total assets.
4.
IS
THIS A STRONG DIVIDEND STOCK?
a. DIVIDEND
YIELD: in 2019 financial year, RANHILL declared a dividend payout of 4.95 sen
per share to shareholders, which amounts to a dividend yield of 5.89%.
b. DIVIDEND
PAYOUT RATIO: the dividend payout ratio amounts to around 66% of total earnings.
c. CONSISTENCY:
the dividend payout was consistent, the dividend paid to shareholders in the last
five years ranged from 3 to 7 sen.
5.
IS
THE MANAGEMENT PERFORMANCE GOOD?
a. RETURN
ON EQUITY (ROE): in 2019 financial year, RANHILL reported a good return of
shareholders’ equity, at 11.91%.
b. COST-TO-INCOME
RATIO: cost-to-income ratio is high, at 590%.
6.
OTHER
INDICATORS:
a. CASH
FLOW: cash flow is positive, around RM 167.3 million, equivalent to RM 0.16 per
share.
b.
SUPPORT BY INSTITUTIONAL INVESTORS: this counter
is well supported by institutional investors, there are 22 institutional
investors at top 30 major shareholders list, including LEMBAGA TABUNG HAJI,
EPF, KUMPULAN WANG PERSARAAN and insurance companies/investment funds. Its
major shareholders are CHEVAL INFRASTRUCTURE FUND LP (17.79%) and LAMBANG
OPTIMA SDN BHD (11.62%).
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